Indian HIV Generics vs. Int'l Patent Lobby

[Seth Johnson <seth.johnson@RealMeasures.dyndns.org>]

199.105.91.6/TREATMENT/HIV+/june2002.PDF

India's Generics Play a  High Stakes Game 

by Anne­Christine d'Adesky 
June / July 2002 

(Excerpt:)

Like New York City, only more extreme, Mumbai  (formerly
Bombay) is a tight patchwork of extravagant  wealth and dire
poverty. Immigrants swarm to its promise of fame and
fortune. But this sophisticated metropolis  is also the AIDS
capital of India. HIV, the ``Bombay  plague,'' has spread to
over 250,000 Mumbai residents,  including half the 100,000
sex workers working in a dusty  12­block district with
10,000 brothels. Government estimates indicate that a total
of four million Indians now  have HIV, but frontline doctors
scoff at that figure, placing the total closer to 10 or 12
million. 


Cipla Enters the Fray 

It seems particularly fitting to find the corporate
headquarters of Cipla Ltd., the now­famous Indian generic
HIV  drug manufacturer, located hard by Mumbai's brothels. 
Cipla burst onto the world stage one year ago when its
maverick president, a chemist named Yusef Hamied, offered a 
copycat three­drug anti­HIV regimen to developing countries'
governments and aid groups like Médecins Sans 
Frontières/Doctors without Borders (MSF) for as little as 
$350 a year. That is one­thirtieth of the standard price. 

The move tipped the scales in a high­pitched battle  for
global drug access being waged by AIDS activists and  groups
like MSF against the multinational brand­name 
pharmaceutical companies controlling drug patents.  These
companies denounced Cipla's act as a threat to the 
international patent system that makes pharmaceutical 
research possible. They also warned that Indian knockoffs
were likely to be of poor quality and would contribute to
drug resistance across Africa and Asia. 

Undeterred, Hamied defended his company's reputation and his
action as perfectly legal under a 1970 Indian  patent act
that protects the patents on drug­making  processes but not
on the final product. Indian companies  can create
alternative manufacturing steps to copy patented drugs and
then legally sell those drugs in India. They  can also
export their products to countries or markets  where no
patents exist for them. Where local laws allow  for
compulsory licensing, the Indian manufacturers can  apply to
sell generic versions of patented drugs so long as  they pay
a licensing fee to the patent holder. That market,  it turns
out, covers much of Africa, Asia, Latin America  and Eastern
Europe, but not the U.S. and Western  Europe. The drugs
involved include medicines for lifethreatening opportunistic
infections as well as for HIV.  ``What Cipla did was show
everyone that the emperor had no clothes,'' stated Bombay
lawyer Anand Grover  of the Lawyer's Collective, an advocacy
group working  on AIDS drug access issues. ``For years, the
multinationals  claimed it cost so much to make their AIDS
drugs, and  they were so hard to make. Now we know it's
simply not  true. The generics make these drugs for pennies,
and they  make other drugs too. So the secret is finally
out. The  truth is, the profits in this industry have been
just staggering.'' 

The potential market for anti­HIV drugs in developing
countries is a minimum of $2.3 billion per year. This  total
is based on a United Nations estimate of the number  of
people living with HIV outside the U.S. and Western  Europe
-- some 38 million --  and the percentage who need 
immediate antiretroviral  treatment to avoid AIDSdefining
illnesses -- around  15%. So at least 5.7 million  people
are eligible to receive HIV drugs, at an annual  price of
around $ 400 per person for the generic drugs. 

Obviously, total sales could soar if people with HIV are 
granted access to drugs earlier in the disease process. 


Keeping Generic Drugs  out of International Trade 

The conflict over HIV generics reached a peak at last 
November's World Trade Organization (WTO) meeting  in Doha,
Qatar, when the 142­member body ruled that  developing
countries can override drugs patents in cases  of national
health crises. They can import generic medicines or issue a
compulsory license to local companies to  manufacture them
and pay royalties to the patent holders. 

But the Doha Declaration requires each developing country to
establish its own manufacturing base if it wishes to  use
generic drugs. The Declaration has no provision  allowing
export of these drugs. An infrastructure for producing drugs
takes years of preparation and a lot of  money. Doha's
failure to cover exports, declared Vinod  Lulla, Cipla's
outspoken Joint Managing Director, ``is a  complete eyewash
and there is no gain. Not allowing  exports is a major
deterrent.'' 

Indian companies will lose their legal advantages  when a
new WTO Trade­Related Intellectual Property  Rights policy
goes into effect in 2005. It calls for India  and other
member­states to respect 20­year patents on  new products
from then on. The Indian pharmaceutical  industry is rushing
to introduce as many generic drugs as  possible before the
2005 cutoff point. 

As Grover points out, the patent battle has revealed  the
real stakes at hand. It is not really the African HIV 
market, which in fact represents only one percent of sales 
for the brand­name companies, but ``their hegemony in  the
multibillion dollar global pharmaceutical industry.''  The
patent­holding corporations worry that AIDS provides a wedge
for foreign generic producers to gain legitimacy and a
foothold in other markets. 

It is a legitimate concern: Cipla, the third­largest drug 
maker in India, is an 87­year­old company with 1,023 
generic products in 130 markets; its US marketing partner 
is Andrx. Cipla's eight HIV drugs are making money, but  it
sees bigger profits in topselling U.S. drugs like Xanax  to
control anxiety and cholesterol­lowering Lipitor, whose 
patents are expiring soon. 

While HIV drugs have  caught the world's attention, the
Indian generic companies have made steady gains in major
drug markets including the U.S., Germany, Britain, Brazil,
China and Japan.  Hetero Drugs, for example, recently
applied to the FDA  to market four generic products,
omeprazole, kezamindine, co­trimoxazole and itraconazole.
The latter two are  used to treat, respectively, HIV­related
pneumocystis  pneumonia and fungal infections. Ranbaxy now
has FDA  approval to sell lisinopril and
hydrochlorothiazide, a  generic version of Merck's
Prinizide, as well as pediatric  midazolam hydrochloride.